8 Smart Money Tactics for Investing in Cryptocurrency

8 Smart Money Tactics for Investing in Cryptocurrency

There’s been a noticeable drop in the number of Canadians engaging with cryptocurrencies. This shift might seem like a setback for some, but it opens up new doors for savvy investors like yourself. With fewer people in the market, you might find trading becomes a bit easier.

To make the most of this opportunity and see profits, you’ll need to trade with enthusiasm and intelligence. That’s where smart money tactics come into play. If you’re looking to dive into the world of cryptocurrency, here are eight tips that can help guide your investment strategy.

1. HODL vs Trading

HODLing, or holding your crypto assets for the long term, banks on the idea that their value will increase over time. It’s a calm, straightforward method. However, it requires patience.

HODLing is an ideal strategy if you’re looking for a long-term commitment to your investment. It’s especially for those who can weather the storm of the market’s volatility without making rash decisions. If you’re busy, prefer simple financial practices, or believe in the bright future of cryptocurrencies, HODLing is for you.

Trading involves buying low and selling high at shorter intervals. This can lead to quicker profits but requires more time, dedication, and knowledge about market trends.

For individuals poised to read and respond to the market’s ebb and flow, trading presents a fascinating opportunity. Yet, with its requirement for sharp mental agility and risk-taking ability, it’s not a match for everyone.

2. Diversify Your Portfolio

Investing across a variety of crypto assets raises the likelihood of huge profits. The crypto world is brimming with opportunities beyond Bitcoin and Ethereum.

Explore other promising cryptocurrencies during your spare time. Just remember to avoid hype-driven assets with no real-world applications.

3. Types of Wallets

Understanding the types of wallets available helps you protect your digital fortune.

Hot wallets offer convenience for traders. Their internet connectivity facilitates quicker transactions, making hot wallets more suitable for everyday use. However, being online also means they’re more vulnerable to hacks and security breaches.

A cold wallet is a tool that stores your cryptocurrency away from the internet. This increases its security and makes it less likely to fall victim to online hacking. They’re often used to hold large amounts of crypto.

One downside is that the transactions may not be as easy to carry out. To access the funds, you would need to connect the wallet to a computer or a network.

4. Select the Right Crypto Platform

A crucial element of your investment strategy is choosing a crypto platform that aligns with your needs. Assess platforms based on their security measures, user interface, transaction fees, and customer support. Coinbase, eToro, and Kraken are popular platforms to take a look at.


Coinbase is known for being very user-friendly, making it perfect for those new to cryptocurrency. It puts a strong focus on keeping your digital assets safe, even offering insurance coverage.

But it’s important to note that it does charge higher fees than many other platforms. Trading fees range from 0.5% to 4.5%.


eToro stands out because it lets you copy the trading strategies of successful investors. This feature is especially appealing to beginners wanting to learn from the pros.

While eToro offers a wide range of assets, be aware of its withdrawal and inactivity fees. They’re higher than some users expect.


Kraken caters to the more advanced trader with its vast selection of cryptocurrencies and features like margin and futures trading. It’s known for its tight security.

It has lower fees than Coinbase, making it an attractive option for cost-conscious traders. However, newcomers might find Kraken’s interface a bit overwhelming.

5. Research

Conduct thorough research to find the best cryptocurrencies for your portfolio. Investigate their market position, technology, real-world applications, and development team. This diligence pays off by guiding you to invest in assets with potential for growth and real-world utility.

6. Monitor Ethereum

Ethereum powers hundreds of decentralized applications. Keeping an eye on the Ethereum price can offer insights into broader market trends, given its pivotal role in the crypto ecosystem.

Movements in Ethereum’s price often precede or indicate shifts in the wider market. It’s an essential metric for investors.

Mobile applications like Blockfolio, CoinMarketCap, and Delta allow users to track the Ethereum price on the go. These apps offer price alerts, so you can have quick responses to changes in the market.

7. Update Your Knowledge

Websites like Coursera, Udemy, or Khan Academy host comprehensive programs that can guide you from a beginner’s level to advanced mastery. Participating in webinars on cryptocurrency can also provide insights from experienced traders and industry experts.

Cryptocurrency podcasts offer a great way to stay updated about the latest developments in the crypto world. Some popular ones include “Unchained,” “Crypto 101,” and “The Bad Crypto Podcast.”

Blogs by financial experts can provide regular updates too. Websites like CoinDesk, Cointelegraph, and The Block are packed with articles and news stories about cryptocurrency. Online forums like Reddit and Quora also allow you to engage in discussions and ask questions to learn from other community members.

8. Understanding Tax Implications

The IRS views digital currencies such as Bitcoin as property, meaning taxes apply to them. Any activity with cryptocurrency could trigger taxes. This includes buying, selling, or even using it for purchases.

To avoid any penalties or fines, keep detailed records of all your cryptocurrency transactions. Consulting with a tax expert who understands the nuances of cryptocurrency can be very helpful. They can assist in determining how much tax you owe.

To make tracking and calculating your taxes easier, consider using cryptocurrency tax software like CryptoTrader.Tax or CoinTracker. These tools can help ensure you meet your tax obligations accurately.

More Smart Money Tactics

You can choose to HODL for long-term gains or trade for quick profits. In either case, diversifying your portfolio with different cryptocurrencies is a good idea.

Keep an eye on Ethereum’s price for market trends, update your knowledge often, and understand tax rules to avoid fines. For more smart money tactics and crypto tips, check out our other blog posts.